TD Economics: BoC done raising rates December 2020, at the earliest | General financial discussion | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
TD Economics: BoC done raising rates December 2020, at the earliest
March 14, 2019
10:36 am
Doug
British Columbia, Canada
Member
Members
Forum Posts: 1824
Member Since:
December 12, 2009
sp_UserOfflineSmall Offline

Source: https://www.bnnbloomberg.ca/bank-of-canada-to-hold-interest-rates-through-2020-td-1.1229018

It may be an "out of consensus" call, but I'd agree with it completely and think it's likely the correct call. sf-cool

Even David Rosenberg has pointed out that he believes Canada's on a knife's edge of a recession (I agree - at least a technical recession will be confirmed in July of this year once we have two quarters of negative GDP growth). In the tweet, Rosenberg also pointed out the GoC yield curve has inverted for the first time since March 2008. sf-cool

GoC 5-year yielding 1.651% versus 1-year yielding 1.691% (source: http://www.worldgovernmentbond.....ry/canada/)

Thoughts?

Cheers,
Doug

March 14, 2019
10:51 am
AltaRed
Member
Members
Forum Posts: 755
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

I don't know about 2020. Much can change in 20 months, as it did in just the past 12 months. I think such forecasts are silly, if not perverse, grandstanding.

By Spring 2020, energy prices could spring upward, Enbridge Line 3 could be in construction, Notley's trains could start operating moving dilbit to both the Gulf Coast and Portland OR. That would result in an increase in capex spend, increased royalties and taxes to the federal treasury.

That doesn't even count a potential burst in Chinese GDP growth and increased exports to them, etc.

I would limit crystal ball gazing to saying no more increases through the end of 2019.

March 14, 2019
11:20 am
Saver Guy_2018
Member
Members
Forum Posts: 10
Member Since:
January 30, 2018
sp_UserOfflineSmall Offline

Who knows what is really going to happen?? If all of us only had a crystal ball. We would all be playing the winning lottery numbers !! sf-laugh

March 14, 2019
11:30 am
Vatox
Member
Members
Forum Posts: 369
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

The inversion of the bond yield curve is a definite indicator for a coming recession. The 5 year note being below the BoC overnight rate will begin to put pressure for interest rate decreases, but not just yet, and hopefully not ever. Debts are a huge weight over current conditions, as governments, households, corporations and investors won’t be able to infuse spending to recover from a recession.

March 14, 2019
8:03 pm
Loonie
Member
Members
Forum Posts: 4722
Member Since:
October 21, 2013
sp_UserOfflineSmall Offline

Wasn't it basically the same crew who predicted 2 or 3 increases for 2019 not too long ago? They all have access to basically the same data, I presume.
I have to take it all with a grain of salt, even though recession may indeed be on the horizon.

March 15, 2019
7:10 am
Bill
Member
Members
Forum Posts: 1264
Member Since:
September 11, 2013
sp_UserOfflineSmall Offline

I agree, Loonie, didn't someone say something once about predicting 10 of the last 3 recessions? I don't think it was Vatox.sf-wink

Any hint of a down turn will be met by increased government spending (today's electorate demands it) via more debt and/or some version of "money printing", and the party will go on.

March 15, 2019
7:54 am
Top It Up
Member
Members
Forum Posts: 1231
Member Since:
December 17, 2016
sp_UserOfflineSmall Offline

One thing is certain, those who locked into the GIC rates offered over the past few months are smiling now because we're likely going to see a softening in both GIC and HISA rates - always go with the bird in the hand, I always say.

March 15, 2019
9:33 am
Vatox
Member
Members
Forum Posts: 369
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

Top It Up said
One thing is certain, those who locked into the GIC rates offered over the past few months are smiling now because we're likely going to see a softening in both GIC and HISA rates - always go with the bird in the hand, I always say.  

Compared to a year ago, rates are still decent despite the decreases. We’ve had such poor rates for so long that they still look juicy.

March 15, 2019
1:55 pm
Vatox
Member
Members
Forum Posts: 369
Member Since:
October 29, 2017
sp_UserOfflineSmall Offline

Bill said

Any hint of a down turn will be met by increased government spending (today's electorate demands it) via more debt and/or some version of "money printing", and the party will go on.  

The Great Reset should have happened in 2009, but quantitative easing prevented it. And now it is a cumulative effect leading to a larger and more painful Great Reset. If governments do the same again, it will just exacerbate the problem and create short term gain with long term pain. Nobody wants to submit but unless they do it will just be a harder fall and it will fall eventually. How nasty of an explosion do people want?

https://www.newsmax.com/finance/johnmauldin/great-reset-economy-debt/2018/12/04/id/893121/

Please write your comments in the forum.